Burger King owner hopes to wipe $133 million in debt for sale

The owner of the Burger King brand in New Zealand is proposing to wipe about $133 million in debt it owes its creditors, to make it more attractive for sale.

The restaurant chain is being sold as a going concern after companies associated with the franchise operators were put into receivership on April 14.

The first receivers report into the business failure said Burger King’s owners faced financial pressures due to its high secured debt, combined with the impact of the Covid-19 pandemic.

Burger King’s parent shareholding companies Tango Finance, Tango New Zealand Limited and Antares New Zealand Holdings Limited were placed in receivership while Burger King’s operator, Antares Restaurant Group, was not.

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The owner of the Burger King brand in NZ is proposing to wipe about $133 million in debt it owes its creditors.


The owner of the Burger King brand in NZ is proposing to wipe about $133 million in debt it owes its creditors.

The only realisable assets of the company were shares in Antares Restaurant Group, owned by Antares New Zealand Holdings.

A compromise deal has been proposed for creditors by Antares Restaurant Group chair Michelle Alexander and chief financial officer Steve Browning.

Under the deal, the three creditors would agree by October 7 to accepting 1 cent in the dollar of the debt owed by Antares Restaurant Group – $2.8 million to Tango Holdings (not in receivership), $96.3 million to Tango NZ Ltd, and $33.7 million to Antares NZ Holdings.

The three would also agree to forgive intercompany debt.

In 2011, Antares was purchased by United States private equity firm Blackstone Group, which manages over US$500 billion worth of assets.

After financial pressures mounted earlier this year, Blackstone was unwilling to provide additional funding and, as a result, the secured debt holder called in receivers in April. The lenders, a consortium of ANZ, ASB and Rabobank, were owed about $50 million.

A compromise agreed in May between Antares Restaurant Group and its suppliers and landlords, along with concessions made by the banks, allowed most of the Burger King outlets to resume trading after the coronavirus level 4 lockdown ended.

“Put simply, without the support of the banks, the franchisor, the suppliers and the landlords, the company would not have been able to continue trading,” Alexander said in the September 29 compromise document.

Under the May compromise, banks would turn over 50 per cent of proceeds above $30 million if a sale managed to achieve that amount.

“The receivers are running a process to sell the shares in the company. Based on indicative bids received, the company has been advised that there is no prospect that the banks will be repaid their secured debt in full.

“When weighing up all factors, including the current balance sheet insolvency of the company created by the guarantee in favour of the banks, the company considers that it is in the best interests of the company and its creditors to propose this compromise.”

Antares Restaurant Group received $11.5 million of wage support for 1918 workers, according to the Ministry of Social Development’s wage subsidy database.

Burger King opened in New Zealand in 1993, and had 83 restaurants employing more than 2600 staff.

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